Changes from plenary report to adopted text

Observations on competitiveness

18. Is deeply convinced that EU spending on science, research and innovation is the best investment in our common European future and for increasing competitiveness and societal progress, and successfully closing the innovation gap; agrees with Mr Draghi that all public R&D spending in the EU should be better coordinated at EU level, meaning properly aligning investments with the EU’s strategic priorities, focusing on funding initiatives that achieve relevant impact and create added value, and that a reformed and strengthened FP is crucial to achieving this; underlines that, in order to ensure real added value, R&D spending should also be better coordinated at national level between Member States; reiterates that the reformed fiscal rules exclude national funds used to co-finance EU programmes, and calls for this possibility to be put to full use in order to boost EU research funding;

19. Underlines the importance of standardisation activities to ensure that European companies can effectively capitalise on the competitive advantage from research and innovation;

20. Underlines the significant role of research and innovation across different industrial sectors that contributes to creating jobs and increasing European competitiveness compared to third countries;

21. Emphasises the importance of the European Innovation Council (EIC) for Europe’s competitiveness; highlights in this regard that investments under the EIC are bridging the ‘valley of death’ and lead to innovations of a disruptive nature that have breakthrough and scale-up potential; highlights also the unique proposition of the EIC Accelerator to provide tailor-made support for high-potential, non-bankable start-ups;

22. Welcomes the fact that 44 % of the Horizon Europe budget to date has contributed to the digital and industrial transitions, most notably by stimulating cooperation for technology development, which are fundamental for European competitiveness;

23. Strongly believes that, beyond their key role for long-term and sustainable competitiveness, applied research, development and innovation policies are instrumental to avoid, anticipate and cope with the main global and societal challenges;

Observations on technical implementation

24. Considers that administrative simplification stagnated under Horizon Europe given that 32 % of participants consider applying to Horizon Europe to be more burdensome than Horizon 2020, while nearly half of participants report no difference, is concerned about the ‘exploded cumulative transaction and administrative costs’; notes that on average beneficiaries reported spending 6-10 % of their project budget on administrative costs, with 48 % reporting administrative costs of more than 10 %, including a 10 % share of beneficiaries reporting administrative costs of more than 20 %; deplores the fact that the time-to-grant under Horizon Europe is longer than it was under Horizon 2020, and that it exceeds the target of eight months set by the Commission; insists on further administrative simplification, streamlining of the relevant procedures, cost cutting and a greater focus on applicants, and underlines that simplification must be for the benefit of the applicants, while ensuring that applications contain all the information needed for the evaluation of their excellence;

25. Recalls that the first full version of the Annotated Model Grant Agreement for Horizon Europe was published only in May 2024, more than three years after the start of the programme; notes that without a full version of this document, beneficiaries are not fully informed of the legal and financial conditions associated with signing a Grant Agreement; recalls that the first version of the Annotated Model Grant Agreement for Horizon 2020 was published before the official start of the programme; notes that the apparent cause of the delayed publication is the corporate approach to Model Grant Agreements which the Commission took for EU programmes under the current multiannual financial framework;

26. Notes that there are various opinions and experiences among different beneficiaries regarding the functionality of lump sums; recognises that some beneficiaries do not consider the introduction of lump-sum funding to be a simplification for them; underlines that the 2024 assessment of lump sum funding presents unclear data, which leaves important worries and questions unanswered, such as the uncertainty of the impact of an ex-post audit, while confirming other objections, such as the artificial increase of the number of work packages; considers that this assessment confirms that lump-sum funding can be a simplification for some beneficiaries, but not for all;

27. Considers that the simplification offered by lump-sum funding consists of removing all obligations on actual cost reporting by beneficiaries to the Commission and removing financial ex-post audits for projects; welcomes the fact that this results in a lower error rate; underlines, however, that the error rate is a tool to ensure proper spending of public funds and not a goal in itself; warns, in that context, against putting at risk the quality of the spending of a highly successful programme by ramping up the use of lump sums too quickly;

28. Observes that the average size of consortia in Horizon Europe is significantly larger than in Horizon 2020; considers that consortia foster collaboration and that bigger consortia contribute to broader, and potentially more diverse, collaboration; underlines, however, that managing bigger consortia also requires more time and effort both in the proposal preparation phase and in the project implementation phase, which takes away resources from performing research; considers, furthermore, that more complex consortia are less attractive to join for newcomers, given the complexity and the resources as well as the experience needed to manage them;

29. Underlines the importance of an open and accessible programme with low thresholds for applying in order to ensure participation of newcomers as well as SMEs; underlines that more than half of SME participants in Horizon Europe are newcomers; considers that administrative burdens, the time investments needed and the complexity of applications risk discouraging SMEs from participating in the programme; notes that the simple, small and fast grants of the SME Instrument under H2020 were a magnet for newcomer SMEs;

30. Considers that the Commission has not succeeded in creating agile but strong management of HEU, which has led to complex implementation; expects that the interim evaluation report should address shortages and possible solutions;

Observations on Pillar 1

31. Recognises the importance of Pillar 1 in promoting scientific excellence and attracting highly-skilled research, through the European Research Council (ERC), and programmes such as the Marie Skłodowska Curie Actions (MSCA);

32. Welcomes the continued success of the ERC; underlines that its success is dependent on the independence of the Scientific Council; stresses that the last few years have shown that the presence of a capable and committed president of the Scientific Council with respected scientific credentials is essential for the functioning and independence of the ERC; notes that the bottom-up calls and independent governance of the ERC Scientific Council have proven highly effective;

33. Highlights the ability of both the ERC and the MSCA to attract scientific talent to Europe; notes the valuable contribution of the MSCA to European scientific leadership; notes with worry the low success rates in the MSCA;

34. Underlines that research projects funded under Pillar 1 should adhere to the principle of ‘high risk/high gain’; suggests clarifying evaluation criteria to strictly ensure the realisation of ‘high risk/high gain’ when evaluating research proposals; observes that ‘high risk’ also means employing new research methods;

35. Emphasises that research infrastructures, in particular digital research infrastructures, provide a vital platform for researchers and innovators across disciplines and sectors to share data, methods and expertise, fostering the development and application of new technologies to strengthen Europe’s technological sovereignty; welcomes, particularly in this regard, the progress made on the European Open Science Cloud and the European Museums Cloud;

Observations on Pillar 2

36. Emphasises that collaborative research is at the heart of the European framework programmes; recognises the importance of Pillar 2, which serves as a vital strategic tool, fostering pan-European collaboration by pooling resources and knowledge, and aligning public and private R&I agendas; notes that collaboration would not occur without EU funding at a similar rate, highlighting the unique added value of EU collaboration programmes, in particular for enabling Europe to address complex societal challenges and integrate businesses into critical, continent-wide value chains; considers that Pillar 2 has fostered research collaboration and has in particular been able to support joint research and innovation agendas for technology maturation through the joint undertakings, which contributes to the competitiveness of the EU;

37. Considers Pillar 2 a strategic tool for enabling pan-European collaboration and pooling of knowledge and resources, attracting private investments, and for bringing together public and private stakeholders across Europe to tackle complex societal challenges; believes it is important to continue support for these collaborations; acknowledges, however, the complexity of Pillar 2; believes that the implementation of this pillar remains too complex and should be improved, simplified and streamlined with a view to targeting results rather than solely addressing expenditure; notes that the number of instruments involved such as a multitude of partnerships, the complex, top-down administrative implementation of missions, and the many budgetary shifts have resulted in unnecessary complexity which discourages applicants, and especially newcomers, from participating; emphasises the importance of the accessibility of these instruments, particularly for SMEs from across all European regions, in order to enable participation for all excellent researchers and innovators as well as to foster the absorption capacities of companies; welcomes the announcement of the rebalancing in Pillar 2 towards a better equilibrium between the different types of R&I activities, from fundamental research to market-oriented innovation, as announced in the second strategic plan for Horizon Europe; notes in that context the conclusion in the European Research and Innovation Area Committee opinion on FP10 that the Cluster structure of Horizon Europe creates an unnecessary obstacle for participants looking for funding, in particular newcomers, as well as the conclusion of the Draghi report that ‘[t]he programme should consolidate the overall fragmented and heterogeneous activities’;

Observations on Pillar 3

38. Notes that scaling up and commercialising research outcomes remains Europe’s greatest challenge; recalls the decisive role of entrepreneurship, for instance in the commercial and economic exploitation of excellent applied research into breakthrough innovation;

39. Highlights that the European Innovation Council is filling a widely recognised investment gap for scale-up finance for break-through innovations; takes note of the very low success rate under the EIC and considers this a confirmation of the relevance of EIC funding as well as a worrying signal of underfunding of the programme; welcomes that fact that the EIC was completed as an instrument by the introduction of transition activities because these complete the innovator’s journey from early idea to scale-up by facilitating technology maturation and validation; underlines the quality and relevance of the advice provided by the EIC Board and recalls in this regard the importance of expert advice to guide the implementation of the framework programme;

40. Considers that the EIC is a needed and excellent instrument in principle; agrees that streamlining and boosting the EIC, attracting private investments and supporting the commercialisation of research is at the core of Pillar 3, as confirmed by the Heitor report; regrets, however, that the Commission made some implementation decisions that led the EIC away from its intended purpose to help companies scale up; recognises that the EIC should have the flexibility to strategically maximise its potential to support breakthrough technology; firmly believes that the EIC can achieve its full potential if the legal and institutional setting of the programme is clarified and strengthened;

41. Regrets that not all of Parliament’s recommendations set out in its resolution of 22 November 2022 on the implementation of the European Innovation Council have been implemented, most notably the recommendation that a thorough assessment be made of ways to improve the EIC’s implementation, considering as an option the establishment of an independent EU body under Article 187 TFEU as the main entity responsible for implementing the EIC; regrets, moreover, that its recommendation to ensure the implementation of both the equity and grant components with direct coordination between the two components has been ignored;

42. Draws attention to the work of the programme managers in the EIC; strongly believes in the approach of strategic intelligence developed by experts with widely recognised expertise in the field to effective programming of strategic challenge-based calls; appreciates, in particular, the work done by programme managers to help projects find and realise added value by bringing together projects with a common interest;

43. Notes the generally positive assessments (in particular in terms of EU added value) made by independent experts of the Knowledge and Innovation Communities; notes that EIT KICs contribute to strengthening links between higher education and business as well as to closing the ‘skills gap’, and that synergies should be explored with the academies introduced in recent EU legislation (e.g. Net Zero Industry Act, Critical Raw Materials Act, Cybersecurity Package); highlights, moreover, that the EIT regional innovation scheme (RIS) activities contribute to reducing the European innovation capacity divide; recalls that more synergies to bridge the innovation divide should be created between the EIT and other actions such as the EU preparatory action entitled ‘Innovation for place-based transformation’ and believes that the EIT KICs could improve synergies within the framework programme (in pillar 3 activities and between pillars), and establish concrete synergies between excellence-driven and place-based innovation, for instance via the implementation of successors of R&I activities led by the Directorate-General for Regional and Urban Policy, such as the Interregional Innovation Investments (I3) instrument;

44. Regrets to conclude, however, that the relevance of the EIT as a programme is questioned by several stakeholders, including some of its biggest beneficiaries; underlines that in principle the concept of knowledge and innovation communities is appreciated by stakeholders as a useful instrument for effective innovation ecosystem development and integration; considers that the two main concerns raised are the financial self-sustainability requirement for KICs and the central management by the EIT organisation which is too bureaucratic and burdensome, and which creates governance difficulties for the KICs; concludes that for many stakeholders the financial and other costs, including the high burden of participating in a KIC, outweigh the benefits of the relatively little funding support relevant for them;

45. Regrets that, although some efforts have already been made, synergies between the EIC, the EIT and the ERC are not sufficiently developed;

Observations on Part 4

46. Welcomes that participation of entities from widening countries has increased in HEU; acknowledges that the innovation divide persists, notwithstanding a slight decrease in the disparities in innovation performance across Europe, in spite of two decades of widening efforts; underlines, however, that the existence of this innovation gap in Europe has negative consequences for the EU as a whole given that it means available talent is left unused and economic disparities within the EU can be expected to grow; notes that this low participation can be partially explained by structural factors, including inadequate national public investment in R&D, which undermines the effectiveness of the national R&I systems, as reflected by low scores on the European Innovation Scoreboard; notes, furthermore, that there is a link between high levels of FP participation and high levels of national public investment in R&D; is strongly convinced that without national reforms, the innovation gap cannot be closed, regardless of the efforts made at European level, and refers to the European Court of Auditors Special Report 09/2022 on this matter; recognises that new and more effective mechanisms to increase widening are needed, but that financing for these actions should primarily come from the national level and be complemented by cohesion policy funds; calls on the Commission to ensure that the upcoming ERA Act lays down strong obligations for Member States to improve the functioning of their R&I system in order to eliminate subpar performance due to structural challenges;

47. Underlines the importance of the Seal of Excellence under Horizon Europe; considers that the Seal in part mitigates the persistent issue of underfunding in Horizon Europe, which significantly hampers the ability to adequately support all high-quality proposals; acknowledges furthermore that the Seal can contribute to improving the relative participation of researchers from widening countries; emphasises, however, that the Seal cannot be considered as a substitute for direct financial support, particularly because the Seal is not a guarantee for funding;

48. Notes that a thriving European innovation ecosystem requires strong and well-connected place-based innovation ecosystems and that a better connected European innovation ecosystem will be essential for enhancing the competitiveness of Europe, its resilience and strategic autonomy; recognises that collaboration among territorial ecosystems enables European regions to leverage their combined strengths to develop innovative solutions more efficiently; underlines that this collaboration also accelerates the commercialisation and scaling of technologies, bolstering the EU’s competitiveness also globally; recognises the vital role of public research organisations, including universities, as drivers of place-based innovation;

Observations on missions and partnerships

49. Highlights the science communication role of the missions and the need to strengthen this even further because this will bring research results closer to society and help address the challenge of distrust in R&I, while simultaneously helping gain societal approval for public investments in R&I; recalls that the Commission communication entitled ‘EU Missions two years on: assessment of progress and way forward’ did not constitute a positive assessment of the missions and concluded that missions had failed on core objectives such as crowding in external funding;

50. Recalls the fundamental role of partnerships in bringing together the Commission and private and/or public partners, and is of the opinion that they must receive continuous support with a defined target and scope; emphasises that public-private partnership governance structures should be streamlined and simplified to avoid unnecessary burdens and enhance focus on key priorities; considers the joint undertakings as very useful instruments to foster better coordination and alignment of research agendas across the EU, as well as to foster co-investment in R&D between the public and private sectors; notes with regret that the Joint Undertakings have not yet resulted in increased R&D spending by European industry overall;

Recommendations for the remaining part of Horizon Europe

51. Notes that no significant changes in the implementation of the missions have taken place since the publication of the communication; concludes that the current approach to missions is not sufficiently oriented towards fostering creative novel and R&I ideas to address challenges; believes mission-oriented programming should have objectives that can be reached through R&I, should be implemented through open calls for bottom-up ideas to achieve the mission, and should be managed through a portfolio approach building on the experience of the EIC programme managers; considers that mission-oriented programming should first and foremost be a novel approach to research programming which puts more emphasis on bottom-up research ideas, which fosters interdisciplinarity and in particular creates space for synergies between Social Sciences, Humanities and the Arts (SSHA)-driven and technology-driven activities, to address problems; therefore calls on the Commission to pilot this approach in the remaining years of Horizon Europe by spending the majority of the funds allocated to the missions through openly formulated calls that invite proposals for R&I activities that can contribute to achieving a specific objective; encourages the Commission to consider whether it is appropriate to continue funding each mission under Horizon Europe and to find additional funding and support for the continuation of the missions in other parts of the EU budget and at national as well as regional level, where appropriate;

52. Supports the proposal in the Heitor report to set up an experimental unit under Horizon Europe to experiment with new implementation methods and instruments in order to foster real simplification for participants and to develop a more agile implementation of the programme; urges the Commission to launch, from 2025, a task force to improve the efficacy of the European Semester, in line with the EU’s share towards the 3 % target, as clearly described in the Draghi and Heitor reports and reiterated by European leaders in the Budapest Declaration on the New European Competitiveness Deal;

53. Insists that the Commission should continue the use of lump-sum funding under HEU, and apply it to beneficiaries for which the assessments show it to be clearly experienced as a simplification, such as SMEs and projects for which there is solid evidence that it is a genuine simplification; underlines in that regard that the intended ramping up of the use of lump sums for the 2026-2027 work programme remains questionable given the existing worries and unknowns regarding the impact of lump sums with regard to the simplification they offer to some beneficiaries and their impact on the quality of the projects funded; calls on the Commission to take all necessary steps to ensure sound and efficient use of EU funds before increasing the share of the Horizon Europe budget spend through lump sums in the last years of Horizon Europe and to explore the further improvement of the system to ensure lump-sum funding leads to genuine simplification for beneficiaries; supports the recommendation of the European Court of Auditors to define the scope of ex-post controls for lump-sum grants;

54. Supports the Heitor report’s urgent call to introduce a ‘Choose Europe’ co-funding line and to turn the current ‘European brain drain’ into a ‘brain gain’ by 2035, noting that this should be considered a major and unique opportunity for Europe in the current uncertain geopolitical context, in particular following the recent US election, and should therefore be implemented urgently from 2025;

55. Calls on the Commission to restore EIC autonomy and agility without delay in order to get rid of existing complex processes that lead to lower implementation; believes the EIC transition activities should be open to proposals based on results from any FP project, regardless of which programme part funded that project;

56. Urges the Commission, as guardian of the Treaties, to rely on recital 72 of the Horizon Europe Regulation to enforce more respect for academic freedom in the EU as well as in associated countries, in particular to use it as a basis to openly and directly address blatant violations of academic freedom by national governments;

57. Recommends that the use of the Do No (Significant) Harm principle should be accompanied by detailed guidance from the Commission on how compliance with the principle will be evaluated in the context of the specific call in which the principle is used;

Recommendations for the 10th Research Framework Programme (FP10)

58. Calls for FP10 to be a stand-alone EU programme, in the context of the upcoming discussion of the highly anticipated Competitiveness Fund, as announced by Commission President Ursula von der Leyen in her speech of 17 July 2024 in Strasbourg, dedicated to EU research and innovation excellence and strategic technology development, with a substantially higher budget appropriate for achieving the 3 % GDP spending target and sufficient to fund at least 75 % of the excellent proposals submitted; recommends that FP10 focus on three core objectives:

(a) creating a European competition of ideas, and a funnel to accelerate the development from fundamental science to innovation scale-up, providing support for blue-sky and basic research as well as strengthening the deployment and exploitation of innovative solutions,

(b) supporting strategic research initiatives which require large-scale and European collaboration, as the programme’s ability to prioritise these initiatives will be of utmost importance for Europe's ability to address the societal challenges it faces as well as for European industry and SMEs, including for technology maturation and fostering of European ecosystems, to address the competitiveness gap with our global competitors, focussing on the development of priority innovative advanced technologies and their translation into concrete applications of innovative products, processes and services,

(c) advancing the ERA, including by addressing the innovation gap in Europe;

59. Recommends that the Commission ensure user-oriented, science-led, effective and efficient implementation of the programme, including by:

(a) implementing an improved governance, inspired by the findings of the Heitor expert group and the Draghi report, addressing the need to improve the programme’s agility, which should:

i. be oriented towards facilitating the best science, technology development and innovation,

ii. contribute to EU priorities on the terms of science and innovation,

iii. be based on the principle of self-governance, through which recognised, independent specialists from the relevant field that act in the public interest can advise on how research and innovation can best contribute to the achievement of the policy priorities set by policymakers; recommends, as part of implementing this principle, setting up new Councils in line with the Heitor report to deliver expert advice on the strategic priorities of the programme as well as on the formulation of call texts to ensure their quality,

(b) including positions for programme managers for the EIC, comparable to programme managers at the American ARPA-style agencies, who are experts appointed from outside the Commission with a proven track record in the relevant field, appointed for a predefined period, as special advisers to the Commissioner responsible for research and innovation to ensure their seniority in the Commission, to manage strategic visionary portfolios of projects, fostering collaboration between projects where relevant across the whole programme for their mutual benefit and set out challenges based on strategic intelligence and with a view to fostering global leadership for Europe in specific areas of their field,

(c) implementing a radical simplification in the administrative work related to the application for and management of FP10 projects, following the proposal of the Heitor report to trust first and check later for the application system as well as keeping the information requested in applications to an absolute minimum – no information which is not absolutely necessary for a good qualitative evaluation of the scientific or innovative quality of a proposal should be included in the proposal stage,